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Can Technology Reinvent How We Care for Seniors?

As America ages, figuring out effective ways to take care of more and more seniors in their homes is a growing challenge. By a 9-to-1 ratio, people prefer to stay in their homes as they get older rather than moving into an institution. So-called "aging in place" can also be cheaper than being in a nursing home or assisted-living facility. With these compelling reasons to find better home care solutions, it is only a matter of time before technology-driven solutions emerge.

Tom Knox thinks he's already come up with one. His new company, CareFamily, is a national Internet-based matchmaker based in Virginia that puts families in touch with caregivers throughout the country who have registered with CareFamily. Since opening the site last year, more than 46,000 caregivers have registered.

They complete information forms, providing biographical and caregiving experience, any healthcare certifications, contact information, their preferred compensation, and a description of the kind of caregiving jobs they want.

People looking for help can see filtered lists of nearby caregivers whose skill, preferred jobs, and compensation come closest to what a person is seeking. It's then up to the person seeking help (most often, a family member) to get in touch with caregivers and make a hiring decision.

CareFamily goes further than this, and its add-on services merit attention. Through agreements with outside vendors, it does background checks on all caregivers registered at its site. It provides a $25,000 bond on each caregiver. It handles all the payroll and tax information for both caregivers and families paying them. And it is developing an online university to provide training for caregivers.

Once a caregiver and customer have been "matched" and start working together, both have access to online tools to manage the relationship, entering the hours the caregiver will be in a customer's home, recurring and special caregiving requirements, medication needs, and even notes about driving to do errands. Regardless of where other family members live, they also can receive permission to access this information so they can monitor the care their family member is receiving, see the caregiver's notes, and even monitor the caregiver's attendance record.

CareFamily is small in terms of its customer base, Knox says, in large measure because the business is so new. He estimates that about 1,700 families have used the company's service since it began and that about 200 care arrangements are active in more than 20 states.

The company's expenses are kept down because the matchmaking, administration, and communications about the caregiving relationship have been automated. In addition, much of the content on the site is provided by caregivers and customers themselves. Registration for caregivers is free and customers only pay CareFamily when they are using the services of a caregiver who is registered on the site. As a result, the company has only eight full-time employees, Knox says, and works with about a dozen contractors.

Another result of having low expenses is that CareFamily can undercut the hourly charges of traditional caregiving agencies. The company's average charge to customers is $15 an hour, he says, compared with about $21 an hour at agencies. Because of its efficiencies, Knox adds, his company keeps only $2 of that average hourly charge and pays the other $13 to its registered caregivers. This hourly pay rate is $3 an hour more than what agencies pay, he claims.

Knox knows about agency fees because he ran one in eastern Virginia for a long time before starting CareFamily. "I don't have anything against agencies," he says. "I ran one for a long time and still own it." Many people, in fact, prefer dealing with a traditional caregiving agency. But lots of people do not. They seek cheaper and perhaps easier alternatives.

While running his agency, Knox says, he noticed that he lost lots of customers to lower-cost solutions. "I found that my biggest competitors were not other agencies," he says. "It was Craigslist." With dollars and budgets tight, people took the do-it-yourself route to save money. Yet they did not have access to any of the support services provided by CareFamily. "There was no liability insurance, no background checks, no bonding, and no attendance monitoring," he says.

"What we've done is build a giant Craigslist on steroids," he says, in a way that keeps the process "very safe and affordable."